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Mortyman
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DY Possibly Interested In Making An Offer On LOT

Mon Apr 29, 2013 11:47 pm

Media here in Norway and also in Polan is Reporting:

Norwegian considering Polish LOT


Norwegian CEO Bjorn Kjos is in the process of obtaining information about the Polish state airline LOT of possibly place a bid.

Norwegian ceo, Mr Bjørn Kjos was this weekend in Poland where he met the country's Finance Minister in Warsaw, writes the Norwegian Finance paper Dagens Næringsliv. The conversation was according to the newspaper Rzeczpospolita about the privatization of the state airline LOT.

The company is struggling and could probably be sold cheap. Norwegian CEO Bjorn Kjos is interested and, according to the newspaper asked for detailed information about the company before considering a possible bid.

- I can confirm that Bjørn Kjos has been in a meeting with the authorities in Poland. The content of the conversations I can not say anything about, says communications director Anne-Sissel Skånvik in Norwegian.

Amendment

According to Dagens Næringsliv , the Polish Treasury works to find a buyer for the ailing company. The process also includes a change of ownership law.

- The Prime Minister has prepared a bill that the Polish government may hold under 51 per cent of LOT in the future, and possibly sell out completely. The proposal is being considered by Parliament and can be resolved within a few weeks, says Wojciech Konefal a spokesperson in the Polish Treasury Department.



Translated excerpts from articles in Polish and Norwegian:

http://www.nrk.no/okonomi/norwegian-vurderer-polske-lot-1.11006055

http://www.rp.pl/artykul/1003930-LOT...hybrydowa.html

http://www.na24.no/article3617414.ece


Well, well, exciting if true ...
 
Prime
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RE: DY Possibly Interested In Making An Offer On LOT

Tue Apr 30, 2013 10:47 am

Very interesting!

As i understand, Kjos want's the 8x 787.

How will they organize this if there is a deal? What will they do with the Embraer fleet, will we see Norwegian branded Embraer's? Norwegian is all about keeping things simple with only 737 (787 for longhaul).

[Edited 2013-04-30 03:48:17]
 
Danny
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RE: DY Possibly Interested In Making An Offer On LOT

Tue Apr 30, 2013 10:49 am

Once they complete due diligence they will run away just like all previous buyers.
 
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Mortyman
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RE: DY Possibly Interested In Making An Offer On LOT

Wed May 01, 2013 1:17 am

It would be surprising if Norwegian would venture into a partnership with partly state owned airline. It would be far off from Norwegian's strategy. However, if the article statement is true, that the government of Polen wants to sell out of LOT completly, it might be more interesting for Norwegian. Maybe the Norwegian airline is interested in their longhaul operations / aircraft only ?
 
WROORD
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RE: DY Possibly Interested In Making An Offer On LOT

Wed May 01, 2013 3:04 am

Quoting Mortyman (Reply 3):
However, if the article statement is true, that the government of Polen wants to sell out of LOT completly, it might be more interesting for Norwegian. Maybe the Norwegian airline is interested in their longhaul operations / aircraft only ?

The goverbnebt of Poland would not sell LOT to a company interested only in their long-haul operations. Any sale would have to have guarantees of preserving the brand of LOT, its hub in WAW and future growth.
 
BestWestern
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RE: DY Possibly Interested In Making An Offer On LOT

Wed May 01, 2013 3:18 am

Quoting WROORD (Reply 4):
The goverbnebt of Poland would not sell LOT to a company interested only in their long-haul operations. Any sale would have to have guarantees of preserving the brand of LOT, its hub in WAW and future growth.

LOT has no future unless it is operated as a commercial entity, rather than a plaything of the Polish government.
Greetings from Hong Kong.... a subsidiary of China Inc.
 
filipair
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RE: DY Possibly Interested In Making An Offer On LOT

Thu May 02, 2013 9:07 pm

Quoting BestWestern (Reply 5):
LOT has no future unless it is operated as a commercial entity, rather than a plaything of the Polish government.

Completely agreed. This is why, IMHO, selling LO to an airline that has a proven track record of success and a desire to maximize the strategic potential of the WAW hub is the best option. (Restrictive EU ownership guidelines blocked TK from buying LO out. That would have been perfect.)

So at the moment, LOT is a huge liability. The many recent CEO's have all had "restructuring" as their main action point, with very mixed results. Most recent talks (link in Polish only, sorry) center on LOT moving more heavily towards the LCC model (i.e. replacing E-jets with 737NG's, unbundling fees, etc). This contrasts with the airline's current strategy to market itself as a boutique Central European connecting hub (787 this summer, premium on ticket prices and the like).

All of this begs the question: what is LOT's future role in the European aviation market? I think addressing the problem from this perspective helps-

LOT's Assets:
- WAW's position as a potential connecting hub between Eastern Europe/Central Asia and Western Europe/North America
- Strong and rapidly growing domestic air travel market
- Low labor costs
- 8 787's on order
- Largest share of Polish air travel market (29% and relatively steady)

LOT's Liabilities:
- Lack of clear strategy and leadership within the airline (here the "government plaything" dynamic comes into play)
- Several years of unprofitable operations have forced the government to offer rescue loans
- The jury is still out whether there is enough local demand for flights east from Warsaw
- Generally weak premium demand in Poland

So is being absorbed by an airline like DY, a low cost carrier with longhaul ambitions, the answer?
 
filipair
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RE: DY Possibly Interested In Making An Offer On LOT

Thu May 02, 2013 10:08 pm

And because we all love routemaps   

...here's what a combined DY/LO shorthaul network would look like (lighter colors for seasonal routes):

Combined Norwegian/LOT shorthaul routes, courtesy of gcmap.com



And to get a sense of the longhaul network/connectivity:

Combined Norwegian/LOT routes from OSL, ARN, WAW, courtesy of gcmap.com


What do y'all think?
 
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Mortyman
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RE: DY Possibly Interested In Making An Offer On LOT

Thu May 02, 2013 10:26 pm

Nice  

But I am not convinced that Norwegian wants to buy LOT and keep the LOT name.
 
ThomasCook
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RE: DY Possibly Interested In Making An Offer On LOT

Thu May 02, 2013 10:36 pm

Quoting Mortyman (Reply 8):
But I am not convinced that Norwegian wants to buy LOT and keep the LOT name.

I would hope that if any such deal takes place, it would be a prerequisite that the LOT name is preserved and that important links to Poland are preserved such as North America.

ThomasCook
A380 Crew
 
Danny
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RE: DY Possibly Interested In Making An Offer On LOT

Fri May 10, 2013 6:35 am

Quoting Filipair (Reply 6):
- WAW's position as a potential connecting hub between Eastern Europe/Central Asia and Western Europe/North America

LOT was never able to capitalise on that.

Quoting Filipair (Reply 6):
Strong and rapidly growing domestic air travel market

Primarily from the local airports which LOT conceded to competition.

Quoting Filipair (Reply 6):
Low labor costs

You're kidding? In majority lazy unionized morons hired through family connections etc. Asy turnournd at LOT should begin with firing of most of them.

Quoting Filipair (Reply 6):
8 787's on order

At unfavourable prices. Once LOT goes under the airframes will become avaliable anyway.

Quoting Filipair (Reply 6):
Largest share of Polish air travel market (29% and relatively steady)

Declining constantly.

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